ing claims. The entire claims process –
from filing the initial loss to receiving
the final check – should not have to
involve the broker at all. Insureds and
their agents deal with the insurance
carrier via an in-house adjuster, an independent or third-party administrator
(TPA). But many of the smaller agencies
have neither the staffing nor resources
to manage claims, especially during
a large-scale CAT event. They may be
counting on their broker to guide them
through the claims process, giving you
an opportunity to provide value-added
services that will set you apart from the
competition.

Hurricane claims

Insurance carriers with large coastal
property exposures have procedures in
place and often increase the number of
adjusters in the hurricane’s projected
strike zone. But even with all of the preparation, things can get quite chaotic after
a highly destructive storm makes landfall. Networks and other systems may go
down. It may take longer than anticipated
to get ahold of a representative; and longer still to obtain a claim number. The
assigned adjuster may be reassigned multiple times and other claims-related issues
will be out of your control.

A broker’s job is to educate agents on
the potential pitfalls so they aren’t caught
off guard. Instead they will appear proficient and practiced – speaking with
confidence when explaining to their policyholders why things don’t appear to be
going as planned. This will go far to reassure an uncertain insured.

Once the initial shock wears off, the
insureds will find themselves in a vulnerable position, wondering what to do next.
It’s a scary place to be. In the aftermath
of a major storm it may take several days
before an adjuster can make it out to survey the damage. In the meantime, policyholders – including property managers
– will look to their agents for guidance,
providing yet another opportunity for the
enterprising broker.

Policyholders often worry that makingtemporary repairs will somehow jeop-ardize their insurance contracts. Adviseyour agent to provide the insured withthe “Duties in the Event of Loss or Dam-age” section of the ISO coverage form. Itwill explain that insureds must “take allreasonable steps to protect the coveredproperty from further damage.”Reading from the policy verbatim mayseem simple and obvious, but many pol-icyholders need to be convinced that it isokay to act. To ensure they will be reim-bursed for the repairs, have their agentadvise them to take before and after pic-tures, and to keep all relevant receipts.

Another topic worth discussing in-volves the large number of contractorsand other vendors who sweep into townfollowing the hurricane. The law of sup-ply and demand necessitates their arrival,and they do provide a service for peoplein serious need. But for an insured whowants nothing more than to be madewhole again as soon as possible, theycan also pose a major dilemma. Agentsshould know that minor temporary re-pairs are permitted, but major whole-sale reconstruction must wait until anassigned adjuster surveys the damageand provides the green light to move for-ward. The insurance carrier must protectagainst catastrophe-related fraud. Whilethis may irritate the policyholder, it’s bet-ter than having a claim denied.

Things should settle down in the weeks
following the storm as those affected ease
back into a sense of normalcy. Now that
the insured is working directly with the
adjuster while coordinating repairs, a
broker needs to set expectations for his
clients. The agent and insured should
understand that the insurance carrier or
TPA is working overtime to settle each
claim. However, payment may not arrive
in the policyholder’s expected timetable
for a number of different reasons. The
sheer volume of claims in the wake of a
major hurricane tends to slow the process
down for each individual policyholder. A
prolonged repair schedule may postpone
payment as the adjuster waits on receipts
to file his final report.

The structure of the policy itself may
also be a contributing factor. If the insured has a “per building” named storm
deductible and say 30 buildings sustain
damage, then the adjuster must individually adjust each separate building to see if
the damage exceeds the per building deductible. While this policy provision ultimately benefits the insured, it does add
additional time in comparison to policies
with a “per occurrence” deductible.

The presence of a separate wind deductible buydown policy may further complicate things, resulting in multiple adjusters
and insurance carriers.

Insurance is a relationship business.
A natural catastrophe presents an astute
property broker with many opportunities to strengthen relationships with clients. The goal is to provide valuable service during each step of the process.